Market Trends of Semiconductor Packaging Industry
Ultra High-density Fan-Out Advanced Packaging Segment to Hold Significant Market Share
- The ultra-high-density fan-out (UHD FO) has more than 18 inputs and outputs (I/O) per square millimeter and line and spacing (L/S) measurements in the redistribution layer (RDL) of 5µm and 5µm. It can be considered an upgraded version of High Density (HD) FO where the L/S suits a more extensive package size for HPC applications like networking and data center servers.
- These UHD FO are beneficial for low/mid-end 2.5D applications with cost-effective solutions such as HPC or server networks compared to 2.5D silicon Through Silicon Via (TSV) interposer packaging. The ultra-high-density fan-out packaging offers dense interconnection, better electrical performance, and the ability to integrate multiple heterogeneous dies in a cost-effective, low-profile semiconductor package. UHD FO will replace Si Interposers in the future through innovative FO-on-substrate and FO-embedded bridge solutions.
- With the development of the internet and the rise of the artificial intelligence industry, high-performance semiconductor integrated circuits have become critical in the semiconductor industry. The 2.5D IC package with ultra-high-density I/O is one of the first structures applied to high-performance computing (HPC) like GPU.
- Ultra-high-density FOWLP enables manufacturers to make smaller two-dimensional connections that redistribute the output of the silicon die to a greater area, enabling higher I/O density, higher bandwidth, and higher performance for modern devices.
- A semiconductor IC quality is a fundamental component contributing to the success of mission-critical, low‐latency 5G services such as autonomous driving and security monitoring. According to GSMA, 5G is forecasted to increase from a global market penetration of 13 percent in 2022 to 64 percent in 2030. The increasing number of 5G applications across countries like the United States, China, India, the United Kingdom, Canada, etc., is expected to significantly increase the number of mobile subscribers that use 5G connectivity. This is expected to increase the demand for ultra-high-density fan-out packaging for ICs.
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Asia-Pacific Expected to Witness Major Growth
- China has a highly ambitious semiconductor agenda, supported by a substantial funding of USD 150 billion. The nation is developing its domestic IC industry to increase its chip production. The Greater China region, comprising Hong Kong, China, and Taiwan, is a significant geopolitical hotspot. The ongoing US-China trade war has further intensified tensions in this area, which houses all the leading process technology, prompting several Chinese firms to invest in their semiconductor industry.
- For instance, in September 2023, China announced its plans to launch a new state-backed investment fund to raise about USD 40 billion for its semiconductor sector. In December 2022, China announced its commitment to a support package exceeding YUAN 1 trillion (USD 143 billion) for its semiconductor industry. This initiative is a crucial step towards achieving self-sufficiency in chip production and is a response to U.S. actions aimed at hindering China's technological progress. The demand for packaging services is anticipated to rise considerably over the forecasted period, owing to the country's intensified efforts to enhance domestic chip manufacturing.
- Japan also holds a significant position in the semiconductor and electronics industries as it is home to some of the essential integrated circuits chipset manufacturers. According to WSTS, the semiconductor industry revenue in Japan grew by 14.2% in 2022, and it is expected to grow further over the coming years. The nation's packaging demand is expanding primarily due to the country's significant advancements in the semiconductor and integrated chip businesses. Japan is quickly reviving its chip manufacturing base to ensure that its automakers and IT firms do not run out of essential components by providing significant funding and financial support to major players active in the market.
- For instance, in February 2023, Taiwan Semiconductor Manufacturing Co (TSMC) announced a plan to build a USD 7 billion chip plant on Kyushu island, with 12 and 16-nanometre chips slated to begin in 2024. To support this investment, the Japanese government has offered a JPY 476 billion subsidy, or about half the expected cost of the factory. Further, Rapidus announced entering a tie-up with IBM for developing and producing cutting-edge 2nm chips, aiming to launch a prototype line in 2025.
- Taiwan's semiconductor industry depends on companies outsourcing semiconductor assembly and testing (OSAT). ASE Technology Holding is the industry leader with its efforts in traditional and sophisticated packaging and advanced testing. Taiwan has made significant strides in the chip packaging and fabless segments of the semiconductor value chain, in addition to its foundry services. According to the latest quarterly World Fab Forecast by SEMI, published in June 2022, Taiwan is expected to lead the world in semiconductor manufacturing equipment expenditure in 2022, with a 52% increase to USD 34 billion. These impressive capabilities are expected to drive demand for packaging services, prompting vendors to enhance their offerings.
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